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Mowgli is living in the Man Village with the girl who lured him in, Shanti, his adopted brother Ranjan, and their parents. However, Mowgli longs to return to the fun of the jungle, and after nearly leading the other children of the village into the jungle, is punished by his adopted father for trying to lead them into danger. Meanwhile, in the jungle, Shere Khan has returned to Baloo and Bagheera's part of the jungle seeking revenge on Mowgli. Baloo sneaks into the Man Village and gets Mowgli to come with him to live in the jungle; however, unbeknownst to them, Shere Khan has also infiltrated the village, only to be chased off by the village people. In the ensuing chaos of the tiger's attack, Shanti and Ranjan go into the jungle to rescue Mowgli, believing that Baloo is a vicious animal who has kidnapped the boy.

Bagheera learns of Mowgli's escape from the village when the humans search the jungle for him, and immediately suspects Baloo. Mowgli instructs Baloo to scare off Shanti should she appear, and rants about the mundane life he had in the Man Village. Baloo and Mowgli journey to King Louie's old temple (King Louie is mentioned to have abandoned it), however when the animals of the jungle criticize Shanti and other aspects of Mowgli's life in the Man Village, the boy leaves, irritated. He runs into Shanti and Ranjan, but Baloo scares Shanti as Mowgli wanted him to. When the truth comes out that Mowgli ordered Baloo to scare her, Shanti and Ranjan run away, abandoning Mowgli.

Baloo realizes that Mowgli misses his old life, but when Mowgli tries to make amends with his human friends, they are confronted by Shere Khan. The tiger chases Mowgli and Shanti to a temple built above a lake of lava, Baloo leaves Ranjan with Bagheera while he goes to save Mowgli and Shanti. After confusing Shere Khan by banging several different gongs, Shanti's presence is revealed to Shere Khan. Baloo attacks Shere Khan just as Mowgli is about to give himself up to save Shanti, but the tiger chases the two children to a statue across a pit of lava. Shere Khan is trapped within the statue's mouth, and it plummets onto a large stone that resides in the lava below. With his nemesis defeated, Mowgli returns to the Man Village with Shanti and Ranjan, but they return to visit Baloo and Bagheera in the jungle on a regular basis.

During one attempt at the classic song The Bear Necessities from the first film, two prickly pears land on and stick to Kaa's head, making him look like Mickey Mouse. This is an example of a Hidden Mickey.

During "W-I-L-D", Timon and Pumbaa can briefly be seen dancing until Baloo bounces them off with his backside.

Osment and Whitman would later co-star again in Kingdom Hearts II, voicing Sora and Yuffie, respectively.

In the 1990s, screenwriting duo Bob Hilgenberg and Rob Muir submitted a Jungle Book 2 screenplay in which Baloo ventured to save his romantic interest from a poacher. Disney ultimately went in a different direction for the sequel.

John Goodman recorded his voice work in New Orleans while Haley Joel Osment recorded his in California. Due to a legal dispute, the character of King Louie from the original Jungle Book could not be included in this film. However, he makes a non-physical appearance as a shadow puppet in the beginning of the film and is briefly mentioned in the middle of the film.
The decision was made to keep Shere Khan in shadow during the beginning of the film to "reflect his 'wounded pride'".

The Jungle Book 2 received generally negative reviews from critics. Based on 88 reviews, the film a "rotten" approval rating of 19% on Rotten Tomatoes, with an average score of 4.4/10 and the general consensus "This inferior rehash of The Jungle Book should have gone straight to video." Another review aggregator, Metacritic, which assigns a normalized rating out of 100 top reviews from mainstream critics, the film received an average score of 38%, based on 24 reviews.

The film was released on February 14, 2003 and opened at #4 in its 4-day opening weekend with $14,109,797. At the end of its run, the film grossed $47,901,582 in the United States and $87,802,017 in foreign countries totaling $135,703,599 worldwide. It could be considered a box office success, based on its $20 million budget.

The Jungle Book 2 was released on both VHS and DVD on June 10, 2003. The bonus features included the behind-the-scenes, some music videos, "W-I-L-D", "I Wan'na Be like You" and "Jungle Rhythm", and deleted scenes. It was re-released again on June 17, 2008 on "Special Edition" DVD. The film was released on Blu-ray on March 18, 2014, following its prequel's first HD Blu-ray release.